In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the MOOYAH franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a MOOYAH franchise, based on Item 7 of the company’s 2020 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a MOOYAH franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned MOOYAH outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of MOOYAH’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average, median, high, and low gross sales for the top quartile, second quartile, third quartile, bottom quartile, and all 56 franchised traditional MOOYAH restaurants that operated for at least 18 months prior to the end of MOOYAH’s 2019 fiscal year and operated for the entirety of MOOYAH’s 2019 fiscal year
- 2019 average food and beverage sales, costs of goods sold, labor costs, occupancy costs, and EBITDA for the top quartile, second quartile, third quartile, bottom quartile, and all 44 franchised traditional MOOYAH restaurants that operated for at least 18 months prior to the end of MOOYAH’s 2019 fiscal year, operated for the entirety of MOOYAH’s 2019 fiscal year, and reported certain costs and profit information to MOOYAH
Section I – Background Information
20 Things You Need to Know About the MOOYAH Burgers, Fries & Shakes Franchise
Kicks Off New Decade with Refreshed Restaurant Model
1. In mid-November 2019, MOOYAH Burgers, Fries & Shakes announced that it had an interior and logo refresh in the works that was set to rock the restaurant system into the new decade with a roll out starting in Q1 of 2020. The new prototype and design come at a critical point for the brand, as the company is actively ramping up franchising efforts in new as well as existing markets across the U.S.
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2. MOOYAH plans to open 14 new locations in 2020, all of which will feature the updated design. Restaurants currently under construction in Hoover, Alabama and Orlando, Florida will be the first to unveil the brand’s new design and were scheduled to open in February 2020.
3. Tony Darden, president of MOOYAH Burgers, Fries & Shakes, said, “This new design and layout will take MOOYAH to the next level in terms of providing a differentiated experience that reduces friction for our Guests and Team Members. This new approach will also align with our overall strategy to be accessible to our Guests in the manner in which they want to enjoy their dining experience. The new MOOYAH provides a high-esteem experience, whether that be through dining in, to-go pick-up or delivery. We are confident this elevated design positions us extremely well to achieve our short- and long-term growth strategies as we partner with existing as well as new Franchise Owners. We truly believe the alignment of design and experience with our second-to-none food quality gives us a competitive advantage across the industry.”
4. MOOYAH’s new design includes the following changes:
- New Dining Areas and Seating Arrangement: MOOYAH restaurants will now feature more community-minded seating areas with high-top tables. New buildouts will also showcase a flexible seating area where Guests are able to move tables to accommodate larger parties, as well as a section of booth seating for Guests who want to stay for an extended period of time. Additionally, a bench will be added near pick-up order shelving so Guests have a dedicated place to wait.
- Purposeful Third-Party and To-Go Pick-Up Areas: In keeping up with consumer demand, MOOYAH will now provide a designated area for shelving that will hold pick-up and to-go orders.
- Closing Off the Kitchen: Up until now, MOOYAH has featured open kitchens, but after gathering Guest feedback and tapping into layout best practices, MOOYAH will now close off the kitchens to create an improved Guest experience, focusing on dining room elements.
- Going Digital: All locations moving forward will feature digital menu boards as well as back-of-house kitchen display systems to enhance throughput and accuracy.
- Logo Refresh: MOOYAH updated its logo to a more streamlined, modern application. The new logo began rolling out systemwide in January along with the remodeled locations.
5. The remodel was visualized in collaboration with Livit, a Madrid-based company that has made a name for itself as a global expert in guest experience design. Livit’s research involved a full brand immersion which included dining at multiple MOOYAH locations, as well as at competitor restaurants. Livit worked closely with the MOOYAH leadership team to complete brand analysis, concept rebranding, concept design, and the eventual prototype.
6. “The Livit team worked extremely hard to understand MOOYAH Burgers, Fries & Shakes and took a deep dive into the brand’s culture and values,” Livit said in a statement. “Livit also looked at where the brand has been, where it stands in the marketplace and how the leadership team envisions its future. The result is a wonderfully updated look that will be recognized by both guests and the fast-casual industry. It has been and remains a pleasure to work with the MOOYAH team.”
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7. Natalie Anderson Liu, vice president of brand for MOOYAH, said the restaurant refresh will be a gamechanger for the brand as the company works toward upgrading its entire system. In addition to the new locations that will be opening with the elevated design, the franchise will work with Franchise Owners to remodel 12 existing locations in 2020, and all existing locations will remodel to the new design by the end of 2024.
8. Liu added, “We have come a long way since our founding in 2007, and we have always embraced change and adapted to our Guests’ evolving needs, as evidenced by our Lifestyle Burgers that align with consumer trends. Converting all locations to our new, modern design and service model is critical to realizing the additional sales and traffic it will bring. Our high-quality, ridiculous food has always set us apart from the competition, but now in adding this world-class design, our valued Guests will truly be getting the best ‘better burger’ experience anywhere.”
Announces Plans to Launch New Vegan Burger
9. In mid-January 2020, MOOYAH Burgers, Fries & Shakes announced that it was launching “The Vegan” burger to its Lifestyle Burger lineup. The Vegan features a Dr. Praeger’s Black Bean burger topped with avocado, grilled onions, sautéed mushrooms, lettuce, tomato, and BBQ sauce on a non-GMO potato bun.
10. Natalie Anderson Liu, vice president of brand for MOOYAH, said, “We wanted to be able to provide our Guests who live a vegan or flexitarian lifestyle with a delicious burger. Our menu is packed with craveable, ridiculicious burgers, so the obvious next evolution is to include a vegan burger that hits that mark. We’ve always had the vegetarian option, but now, we’re able to meet the needs of everyone, including those with vegan preferences.”
11. MOOYAH has taken its time to carefully select the perfect black bean vegan burger to replace its vegetarian burger and found it with the Dr. Praeger’s brand. In April 2019, MOOYAH rolled out Lifestyle Burgers, including Paleo, Keto, low calorie, vegetarian, and gluten-free options.
12. With the success that MOOYAH has seen with its Lifestyle Burgers, the brand officially added its lifestyle lineup to the permanent menu in January 2020 along with “The Vegan.” By adding them to the permanent menu, MOOYAH expects the popularity of Lifestyle Burgers to expand, making them a go-to staple for loyal fans and new Guests who will gravitate to MOOYAH for these options.
13. Along with the rollout of The Vegan, MOOYAH is thrilled to be partnering with Avocados From Mexico for a first-quarter promotion. The brands are joining up on a multi-tactic marketing campaign that includes giving Guests on the MOOYAH rewards app free avocado. “Fresh avocado makes burgers better, which is why it’s part of all our Lifestyle Burger recipes, including the newest addition, The Vegan,” said Anderson Liu.
Initiates Nationwide Restaurant Deep Cleaning Event
14. In late March 2020, in response to the mounting health concerns tied to coronavirus (COVID-19), MOOYAH Burgers, Fries & Shakes announced that it would be implementing deep cleaning events after closing on Monday, March 23, at each of its 76 U.S. restaurants in Alabama, Arkansas, California, Connecticut, Florida, Illinois, Louisiana, Massachusetts, Montana, New Hampshire, New Jersey, New York, North Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin, while inviting other restaurant brands to follow suit.
15. To encourage other restaurants to join in the deep cleaning efforts, MOOYAH used the hashtags #RestaurantStrong and #TogetherAtHome on social media. MOOYAH is hoping that in addition to their team posting content to highlight their sanitizing work, other restaurants across America will join together and promote their deep cleaning, as well.
16. Since the beginning of the outbreak, MOOYAH Franchise Owners heightened scrutiny on already stringent personal hygiene and restaurant sanitation procedures. Franchisees also quickly moved to packaging all food to-go and implemented free delivery with no order minimums.
17. Tony Darden, president of MOOYAH Burgers, Fries & Shakes, said, “Now is the time to band together as a restaurant community, and help families feel good about being able to order delivery, curbside delivery or to-go from their favorite restaurants. This is truly a movement to inspire confidence in the restaurant industry as a whole. We are encouraging all restaurants nationwide to come together and do a deep clean of their restaurants to keep families and Team Members safe and fed during this critical time.”
18. MOOYAH Burgers, Fries & Shakes was founded in 2007 by Rich Hicks and Todd Istre in Plano, Texas. Although MOOYAH had been selling shakes since it first started, the brand didn’t officially add “Shakes” to its name until 2009. MOOYAH started franchising not long after it opened and more restaurants were opened around Texas. Over the years, MOOYAH has continued to expand its menu with new additions such as sweet potato fries.
19. In 2013, MOOYAH opened its 50th domestic location and also launched its first international store in Dubai. A few years later, in 2016, the company celebrated the opening of its 100th restaurant. The following year, MOOYAH was acquired by private equity firms Gala Capital Partners, LLC and Balmoral Funds, LLC for an undisclosed amount.
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20. MOOYAH Burgers, Fries & Shakes did not rank on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of MOOYAH franchise costs, based on Item 7 of the company’s 2020 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on MOOYAH’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 73
- Outlets at the End of the Year: 77
- Net Change: +4
- Outlets at the Start of the Year: 77
- Outlets at the End of the Year: 73
- Net Change: -4
- Outlets at the Start of the Year: 73
- Outlets at the End of the Year: 74
- Net Change: +1
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 2
- Net Change: -1
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 1
- Net Change: -1
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 2
- Net Change: +1
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
- As used in this Item 19, the following terms have the meanings given them below:
- “2019 Measurement Period” means MOOYAH’s 2019 fiscal year, which began on December 31, 2018 and ended on December 29, 2019.
- “Costs of Goods Sold” are the amounts, as reported by the franchisee, spent to purchase and have delivered to the Restaurant: (i) the products, inventory, and ingredients necessary to prepare the food and beverage items offered for sale in the Restaurant, and (ii) the paper products and inventory used in delivering food and beverage products to the Restaurant’s customers, including napkins, paper bags, cups and straws, liners, food containers, and plastic utensils.
- “EBITDA” means the Restaurant’s earnings before interest, taxes, depreciation, and amortization, as reported by the franchisees, calculated by subtracting from the Restaurant’s Total Food and Beverage Sales all expenses associated with operating the Restaurant, including promotional discounts, employee meal discounts and complimentary meals, the Restaurant’s Costs of Goods Sold, Labor Costs, Occupancy Costs, and all of the Restaurant’s other operating expenses (including royalties and other fees paid by the franchisee to MOOYAH), in every case, as reported by the franchisee.
- “Gross Sales” means all sales, revenues, charges, and receipts received by a Restaurant or attributed to a Restaurant, whether from cash, check, credit or debit card, barter exchange, trade credit or other credit transactions, but exclusive of Sales Tax and any refunds made for a Restaurant’s customers.
- “Sales Tax” includes, but is not limited to, sales or use tax, goods and services tax, gross receipts tax, excise tax or other similar tax collected by the franchisee from the franchisee’s customers and paid to the appropriate taxing authority.
- Payments by gift certificate, gift card, or similar programs are included in Gross Sales when the gift certificate, gift card, or similar item is redeemed.
- Gross Sales also includes all insurance proceeds the franchisee received for loss or interruption of business due to a casualty or similar event at the Restaurant.
- This definition is the same definition for “Gross Sales” that is used in the Franchise Agreement and that will serve as the basis for your calculation of royalty and certain other fees.
- “Labor Costs” are the amounts spent on restaurant wages (salaried and hourly), bonuses, payroll taxes, payroll fees, benefits (insurance, 401k, vacation, etc.), and other employee-related labor expenses. This does not include owner-operator salary.
- “Non-Traditional Site” means Restaurants that operate at non-traditional sites (such as mall food courts, airports, hospitals, cafeterias, commissaries, schools, hotels, office buildings and stadiums, arenas, ballparks, festivals, fairs, military bases, and other mass gathering locations or events).
- “Occupancy Costs” are the amounts spent by the franchisee to maintain its possession of the premises from which the Restaurant is operated and to open and operate the physical premises, including amounts owed to the landlord for rent and the Restaurant’s share of certain of the landlord’s real estate taxes, insurance, and common area maintenance expenses (when applicable), the costs of maintaining the property and casualty insurance, the costs of utilities, and other costs related to the premises of the Restaurant.
- “Total Food and Beverage Sales” means the portion of the Restaurant’s revenue that was attributed to the sale of food and beverage products at the Restaurant, as reported by the franchisee. Total Food and Beverage Sales excludes any sales tax collected by the franchisee from the franchisee’s customers and paid to the appropriate taxing authority, but it does not exclude discounts provided by the franchisee to the customer or employee; as a result, the Total Food and Beverage Sales are not the same as Gross Sales or Net Sales, and are not the amount on which you would pay royalties, brand fund contributions, or other fees that are based on Gross Sales (as defined above and in the Franchise Agreement).
Data Sets and Methodology
- As of December 29, 2019, there were a total of 76 Restaurants in operation in the United States, and 74 of them were owned and operated by third-party franchisees.
- Of the 74 franchised Restaurants, 7 either operated at Non-Traditional Sites or had limited operating hours, and 11 did not operate for at least 18 months prior to the end of MOOYAH’s 2019 fiscal year.
- The remaining 56 Restaurants make up the “Complete Set” of franchised Restaurants that operated standard Restaurants during the entirety of the 2019 Measurement Period. The results shown in Part 1 below are the results of the Complete Set of 56 Restaurants owned and operated by third-party franchisees.
- Certain, but not all, of the Restaurants in the Complete Set whose data is reported in Part 1 below also reported to MOOYAH their Total Food and Beverage Sales, Costs of Goods Sold, Labor Costs, Occupancy Costs, and EBITDA for the 2019 Measurement Period. Those data points for the franchised Restaurants who reported them are set forth in Part 2 below.
- The data presented in the charts in Part 1 below is data MOOYAH obtained by polling the information directly from the franchisees’ point-of-sale systems. The data presented in the charts in Part 2 below were reported to MOOYAH by the franchisees of the reporting Restaurants.
- In all cases, the data used was the franchisees’ data. Neither MOOYAH nor its affiliates have undertaken an independent investigation to verify the data that MOOYAH polled from the franchisees’ point-of-sale systems or that was provided to MOOYAH by the reporting franchisees.
- Because the numbers of Restaurants that comprise the data sets reported in Parts 1 and 2 below are different and are sorted by different criteria, the Restaurant numbers indicated in the chart in Part 1 do not correlate to or match the Restaurant numbers in the charts in Part 2.
- Moreover, as described in further detail above in the Definitions section, Gross Sales and Total Food and Beverage Sales are calculated differently for the same Restaurant. As a result, Part 1 and Part 2 should be read independently of each other.
Part 1 – Average, Median, Highest, and Lowest Gross Sales
- The charts below show the data for 5 groups of Restaurants: first, MOOYAH shows results for all 56 of the franchised Restaurants that make up the Complete Set, as a group. Then, MOOYAH sorted the Complete Set into 4 quartiles, each having 14 Restaurants, ranked (highest to lowest) by the amount of Gross Sales reported by the Restaurants for the 2019 Measurement Period.
Complete Set (56 Restaurants)